Advancing Medicines for Neglected and Rare Diseases Through Innovative Business Models

OTC: KBIO www.kalobios.com

| Corporate Overview 1

Forward-Looking Statements

| Corporate Overview 2

This presentation contains forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.Forward-looking statements reflect management’s current knowledge, assumptions, judgment and expectations regarding future performance or events.Although management believes that the expectations reflected in such statements are reasonable, they give no assurance that such expectations will prove to becorrect, and actual results could differ materially from the forward-looking statements.

Words such as “will,” “expect,” “intend,” “plan,” “predict,” “potential,” “possible,” and similar expressions identify forward-looking statements, including, withoutlimitation, statements related to the scope, progress, expansion, and costs of developing and commercializing our product candidates, anticipated regulatoryincentives for product candidates, and anticipated expenses related to development activities, clinical trials and the development and potential commercializationof product candidates.

Forward-looking statements are subject to risks and uncertainties including, but not limited to, the Company’s ability to execute its revised strategy and businessplan; the ability of the Company to list its common stock on a national securities exchange; the Company’s access to limited cash reserves and its ability toobtain additional capital, including the additional capital which will be necessary to complete the clinical trials that the Company has initiated or plans to initiate;the potential timing and outcomes of clinical studies of benznidazole, lenzilumab, ifabotuzumab or any other product candidates; the commercial viability of theCompany’s proposed drug pricing program; the ability of the Company to timely source adequate supply of its development products from third-partymanufacturers on whom the Company depends; the potential, if any, for future development of any of its present or future products; the Company's ability tosuccessfully progress, partner or complete further development of its programs; the ability of the Company to identify and develop additional products; theuncertainties inherent in clinical testing; the timing, cost and uncertainty of obtaining regulatory approvals and reaching other development milestones; theCompany’s ability to apply or receive Priority Review Vouchers; the Company's ability to protect the Company's intellectual property; competition; and changes inthe regulatory landscape or the imposition of regulations that affect the Company's products; and the various risks described in the "Risk Factors" and elsewherein the Company's periodic and other filings with the Securities and Exchange Commission.

You are cautioned not to place undue reliance on any forward-looking statements, which speak only as of the date of this release. The company has noobligation, and expressly disclaims any obligation to update, revise or correct any of the forward-looking statements, whether as a result of new information,future events or otherwise.

Turnaround focused on high-value neglected and rare diseases, including pediatric

Pipeline with multiple potential near- and longer-term catalysts

• Benznidazole: 505(b)(2) development pathway for Chagas disease; possible PRV

• Lenzilumab: recombinant mAb; possible PRV

• Ifabotuzumab: recombinant mAb; pediatric and orphan blood and solid cancers; possible PRV; ready for partnering

Experienced, focused new management with track record of efficient execution, commitment to leadership in responsible, transparent pricing

Compelling Investment Opportunity

| Corporate Overview 3

LeadershipCameron Durrant, MD, MBAChairman and CEOo Senior pharmaceutical and biotech exec, turnaround

specialisto Senior exec roles at Pharmacia/Pfizer, J+J in US,

Merck, GSK in Europe; experience as Exec Chairman, CEO and CFO; CEO roles at three specialty pharma groups

o Expertise in anti-infectives, pediatrics, oncology

Morgan LamChief Scientific Officero Extensive industry experience in clinical researcho Head of Clinical Operations and Development

KaloBioso Executive Director, Medical Affairs, Geron

Dave Tousley, MBA, CPAInterim Chief Financial Officero More than 35 years experience in biotech, spec

pharma, big pharmao Senior exec roles, President, COO, CFOo Pasteur, Merieux, Connaught, AVAX, airPharma,

PediaMed, DARA Biosciences

Tariq Arshad, MD, MBAConsultant focused on medical affairso Extensive industry experience in clinical developmento Experienced in orphan, pediatrics, oncology, pediatric oncology, immunologyo Pharmacia/Pfizer, Genentech, Xoma

Niv Caviar, MBAConsultant focused on corporate/business developmento Senior functional roles in marketing, business development, strategic planningo Senior exec roles, CEO, EVP-CBO, CFO, VP Bus Devo La Jolla Pharma, Allergan, Suneva, SpineOvations, Affymetrix, Accenture

Christopher BoweConsultant focused on corporate affairso Deep experience advising CEOs on articulating, executing strategy through

corporate affairso Former Strategic Affairs advisor at Schering-Plougho Industry thought leader, prior award-winning writer Financial Times

Steve Pal, MBAConsultant focused on commercialo Global pharma and consumer healthcare product commercialisationo Former Corporate VP Global Strategic Marketing, Health Outcomes, Strategy

and Research, Global Medical Affairs, Allergan

| Corporate Overview 4

Board of Directors

Cameron Durrant, MD, MBAChairman

| Corporate Overview 5

Ronald Barliant, JDo Of Counsel at Goldberg Kohn, extensive experience representing debtors and

creditors in complex bankruptcy caseso United States bankruptcy judge for the Northern District of Illinois 1988 to 2002

Dale Chappell, MD, MBAo Managing member of Black Horse Capital Management, LLCo Previously associate at Chilton Investment Company specializing in healthcare

Timothy Morris, CPAo CFO AcelRx Pharmaceuticals; also Head of Business Developmento CFO, SVP Finance and Global Corporate Development VIVUS, Inc.

Ezra Friedbergo Founder and general partner of Multiplier Capital, LPo >20 years investing experience across public and private companies

Two-Pronged Value Model: a Unique Approach To Near-Term Return Propelling Long-Term Value Creation

| Corporate Overview 6

Smart Investment in underappreciated assets

LeverageFDA incentives for better efficiency

Value Options From multiple FDA catalysts like PRV

Value Creation Potential robust commercial return

HuntLate-stage, neglected, rare/orphan assets

Priority Review Vouchers (PRVs) Create Options For Significant Potential Return

| Corporate Overview 7

Highest disclosed sale price so far for PRV is $350MM

Rare Pediatric Diseases (RPD)

Neglected Tropical

Diseases (NTD)

o Holder of PRV can receive priority review for any NDA/BLA

o PRV can be sold to company seeking a competitive jump

o KaloBios open to novel potential PRV transaction structures

| Corporate Overview 8

Funding dead-end, winding down Oct 2015

Martin Shkreli investment late Nov 2015

Shkreli arrest, indictment Dec 2015

Chapter 11 filing Dec 2015

Delisted by Nasdaq Jan 2016 Two new board members Jan 2016

New CEO Mar 2016

Announced Responsible Pricing Model April 2016

Exit from Chapter 11 bankruptcy June 30, 2016

Lenzilumab Phase 1 start July 2016

Shkreli governance agreement July 2016

Shkreli stake extinguished Aug 2016

Current with SEC filings Sept 2016

San Francisco R&D company, mAb platform

FDA meeting Dec 2016 and positive minutes Jan 2017

KaloBios Turnaround Momentum Builds: Rising from the Ashes

Current Pipeline

| Corporate Overview 9

Pre-clin Phase I Phase II Phase III NDA/BLA

Benznidazole (potential PRV)Chagas diseaseAnti-infective

LenzilumabCMML Anti-GM-CSF mAb

Lenzilumab (potential PRV)JMML (peds) – dependent on interim data in CMMLAnti-GM-CSF mAb

Ifabotuzumab (potential PRV)Solid (peds) tumorsAnti-EphA3 mAb

Partnering potential

Intend to seek approval pursuant to 505(b)(2) pathway

Benznidazole

a potential treatment for Chagas disease

| Corporate Overview 10

o On FDA list of NTDs eligible for PRV

o Neglected tropical disease presenting in the US and other nations

o Currently no FDA-approved treatments

o Immediate need for reliable benznidazole supply in US and abroad

CHAGAS disease

| Corporate Overview 11

Insect carries the parasite called Trypanosoma cruzi

Infected individuals in US*

Can also affect swallowing, digestion and cause neurological complications

300,000

* Source: CDC

A chronic, potentially life-threatening infectious disease spread by contact with feces of an infected triatomine insect, called “kissing bugs”

KEY TAKEAWAYS

Significant portion of chronic patients progress to serious heart illness

Benznidazole: the Preferred Treatment Globally for Chagas

| Corporate Overview 12

•Used in tens of thousands of patients

40 years of clinical experience, primarily in Latin America

•Believed to work by inducing free radicals damaging DNA within parasite •Better tolerated in children; side effect profile extremely well known

Efficacy ~60% or more in children and can be higher in young children, according to published studies

Only available in US via special protocol with CDC

Drug supply believed to be sporadic, product difficult to obtain

N

NHN

N

Benznidazole Strategy, Development Plan On Track

| Corporate Overview 13

Positive FDA Guidance 505(b)(2) Pathway PRV Eligibility Confirmed Progress to Submission

☛ Received minutes from productive meeting

☛ Acceptable to FDA

☛ Expect no clinical efficacy or safety studies

☛ Currently expected to be eligible if approved for Chagas disease

☛ Expect to progress expeditiously toward a submission

2016 2017H1 H2 H1 H2

Manufacturing (CMC)Analytical methods developmentDrug substanceDrug product Stability studies

Non-Clinical (Non-Human) Metabolism / PKToxicity assessmentT.cruzi biologyEnvironmental assessment

ClinicalSummary of relevant clinical studiesRight of Reference & data extraction for studiesHuman bioavailability (BA) Study

RegulatoryPre-IND meeting & open INDOrphan drug status applicationPediatric planPre-NDA meetingAssembly of NDA & NDA filing

Benznidazole Target Approval Plan

| Corporate Overview 14

Pre-IND meeting IND submission

NDA filing 2018

Lenzilumab

a potential pipeline in a product

| Corporate Overview 15

o High unmet need

o Patients typically unsuitable for stem cell transplant

o 40-90% patients show hypersensitivity to GM-CSF

CMML overview

| Corporate Overview 16

Recently classified as separate disease with distinct natural history*

Median overall survival rate in months

Newly diagnosed US patients per year

Age at diagnosis

~1,100

* Formerly classified as subtype of the myelodysplastic syndromes (MDS)

60

a rare hematologic cancer

20

KEY TAKEAWAYS

o No FDA-approved treatment

o Clear unmet need

o Potential for a rare pediatric disease PRV

o GM-CSF hypersensitivity is hallmark

o Pediatric oncology largely ignored in clinical development

JMML overview

| Corporate Overview 17

Event-free survival rate at 5 years (with bone marrow transplant)

New US cases per year

Age of majority of patients at diagnosis is 4 years or younger

~420

very rare, frequently lethal pediatric leukemia

~52%

KEY TAKEAWAYS

Lenzilumab is a Potent Inhibitor of GM-CSF Function In Vitro

| Corporate Overview 18

Inhibits GM-CSF-dependent Proliferation of Human TF-1 Leukemia Cells

Blocks GM-CSF-induced STAT5 Phosphorylation in Human TF-1 Leukemia Cells

Source: KaloBios laboratory notebook

STAT5 phosphorylation detection in TF-1 Cells by Flow Cytometry

Inhibition of STAT5 phosphorylation by lenzilumab in TF-1 Cells (+ 2 ng/mL GM-CSF)

0.001 0.01 0.1 1 10Lenzilumab (µg/mL)

25

20

15

10

0

5

40

30

20

10

0

MFI

0.01 0.1 1 10 100GM-CSF (ng/mL)

Lenzilumab

0.1 1 10 100 1000lgG (pM)

100

50

0

Lenzilumab

Control antibody

% G

row

th

Source: KaloBios pre-clinical study

MFI = mean fluorescence intensity

Lenzilumab: a Pipeline in a Drug Opportunity

| Corporate Overview 19

JMML

ALPS / RALD

Cytokine Release Syndrome

AMML

RASopathies(e.g. CFC syndrome, Costello syndrome)

Noonan Syndrome with PTPN11

CMML

CML

Plexiform Neurofibroma

Pediatric Multiple Sclerosis

US ADDRESSABLE POPULATION

325350

500

600

700

8001,900

5,800

24,000

40,000

Ifabotuzumab

significant potential for partnering and development

| Corporate Overview 20

Ifabotuzumab Has Four Postulated Mechanisms of Action

| Corporate Overview 21

ADCC Mediated Killing of Tumor Cells

Direct Apoptosis of Tumor Cells

Disruption of Tumor Vasculature through Cell

Rounding

Anti-fibrotic EffectKB004 has 4 Postulated Mechanisms of Action (MOA)

1. ADCC Mediated Killing of Tumor Cells

2. Direct Apoptosis ofTumor Cells

NK Cell

ADCC

KB004

EphA3

KB004

EphA3

KB004

EphA3

3. Disruption of Tumor Vasculature through

Cell Rounding

4. Anti-fibrotic Effect

KB004

EphA3

Ifabotuzumab

KB004 has 4 Postulated Mechanisms of Action (MOA)

1. ADCC Mediated Killing of Tumor Cells

2. Direct Apoptosis ofTumor Cells

NK Cell

ADCC

KB004

EphA3

KB004

EphA3

KB004

EphA3

3. Disruption of Tumor Vasculature through

Cell Rounding

4. Anti-fibrotic Effect

KB004

EphA3

Ifabotuzumab

KB004 has 4 Postulated Mechanisms of Action (MOA)

1. ADCC Mediated Killing of Tumor Cells

2. Direct Apoptosis ofTumor Cells

NK Cell

ADCC

KB004

EphA3

KB004

EphA3

KB004

EphA3

3. Disruption of Tumor Vasculature through

Cell Rounding

4. Anti-fibrotic Effect

KB004

EphA3

Ifabotuzumab

KB004 has 4 Postulated Mechanisms of Action (MOA)

1. ADCC Mediated Killing of Tumor Cells

2. Direct Apoptosis ofTumor Cells

NK Cell

ADCC

KB004

EphA3

KB004

EphA3

KB004

EphA3

3. Disruption of Tumor Vasculature through

Cell Rounding

4. Anti-fibrotic Effect

KB004

EphA3

Ifabotuzumab

Humaneered® monoclonal antibody for Ephrin type-A receptor 3 (EphA3)

Capitalization Summary as of 1/9/17

| Corporate Overview 22

Debt $4.3 million

Common Shares Outstanding 14.9 million

Stock Options (WAEP $5.82) 2.1 million

Warrants (WAEP $14.24) 0.3 million

Fully Diluted Shares Outstanding 17.3 million

Note: share and per share amounts as of 9/30/16 – last 10-Q filing Debt includes term loan financing closed on 12/21/16

Demonstrated History of Swift Execution in Challenging Circumstances

| Corporate Overview 23

JUN JUL AUG SEP DEC

Emerge in six months from complex Chapter 11 bankruptcy

Lenzilumab Phase 1 trial started

Extinguished Martin Shkreli’s stake in the company

Current with Securities and Exchange Commission periodic reporting requirements

Assembled and filed three 10-Qs and a 10-K within three months

Productive FDA meeting on benznidazole

30 24 29 23 6

2 0 1 6

Summary

Unique near-term/long-term potential value creation opportunity

Thoughtful business strategy that leverages existing U.S. regulatory and development incentives

Attractive asset portfolio with multiple potential milestones and partnering prospects

Deeply committed and focused new management team with an unwavering commitment to success

| Corporate Overview 24